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Your Business

News/Business. A focus on issues facing small business in the United States.

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America 5, Us 5, Maine 3, Sarah Robinson 2, Schwarz 2, Chicago 2, L'oreal 2, Virginia 2, Robert Schwarz 1, Adam Sutton 1, John 1, Google 1, J.j. Ramberg 1, Bria Brian 1, Nordstrom 's 1, Rachel Weiss At L'oreal Usa 1, Starbucks 1, Msn 1, Yourbusiness 1, An American Express 1,
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  MSNBC    Your Business    News/Business. A focus on issues  
   facing small business in the United States.  

    April 21, 2013
    4:30 - 4:59am PDT  

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this art i san son of a cobbler wanted to create a 100% american made product. see how he worked with other small businesses across the country to do that and make them all profitable. and, who do you seek out when you want to get your product or service considered by the big brands? come on, small business. it's time to make money coming up next on "your business."
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hi there, everyone. i'm j.j. ramberg and welcome to "your business" the show dedicate dedicated to giving you tips and advice to help your small business grow. maybe it's a trend or maybe it never went out of style, but it seems that now, more than ever, touting the fact that your product is made in the usa is a big draw for customers. and it seems that americans are willing to pay more, sometimes even much more for products that are made here. when george had trouble finding a high-quality stylish pair of american made shoes, he decided he'd make them himself. and in the process, he stoked the artisan economy supporting
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not only his business but also reviving and supporting two other small businesses along the way. george grew up working in his family's suburban chicago cobbler shop. there he watched and learned the old world craft of repairing and rebuilding shoes from his father, john, an immigrant from greece. >> the first time my dad ever brought me to the shoe repair, he said by the end of the day you have to haveipolished. and at the time i didn't know what he was trying to do. scare me. he didn't want me to go into the shoe business. >> kids get dirty, you know, and it's nice. >> after college george start add career as a teacher, but soon found himself daydreaming about being his own boss and going into the shoe business just like his dad. >> growing up, you know, in my family you always had to buy shoes that could be resoled,
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shoes that would last. >> george realized where things are disposable, a well made pair of american shoes was hard to come by. >> i went to nordstrom's, to barney's. i went everywhere and it didn't exist. >> so george set out to assemble a group of artisans to revive the art of shoe crafting in the united states paying special attention to sourcing all of the materials and labor in america. >> that's kind of when the idea of sparked of how could we make a shoe or boots in america, make them out of the best components really in the world, hand craft them the old-fashioned way, and offer them at a price that's attainable. >> he named his company oak street boot makers and started his search to find the best materials possible for his uber american shoes. he didn't have to go far to source the most important ingredient, the leather. it just so happened the last remaining in chicago, a fourth
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generation family run business, was just a few miles away. >> horween makes some of the best leather in the world. i literally spoke with nick and skip horween and that's kind of how the journey started. >> he's local so is here at least once a month, but we talk much more often. he wants to know what the footage is, when is it going to be ready, how is it looking? that's a service we're here to provide. >> horween is the longtime supplier of leather to companies that make high-end shoes. nick horween, the fifth generation at his family's company, is very interested in making sure the leather that takes up to six months to tan is just right even for a smaller company like oak street. >> making leather is a craft. there's a lot more steps than people realize. >> with the leather sourced in america, george started working on his designs. many of them on the classic boat shoe. the key element in his version
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hand sewn seams. he went searching for a place he could assemble a small contingent of sewers, the only place left in america that had a few crafts people with that unique skill was maine. once one of of the state's biggest employers, the shoe industry has all but disappeared there with the work being done cheaper overseas. the factory in bangor is one of only four left in the entire state. >> when george contacted me and wanted to come and see the factory, he sort of fell in love with what we were doing. and then he started to tell me a story in getting back to the whole, hey, i want to make product in america. >> the timing was perfect, the factory was not going to make it without his influx of work for its highly skilled hand sewers and crafts people. >> he really came along as my business with a couple of other customers was dwindling down to nothing. and i was wondering what i was
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going to do. >> with the all-american high-quality supply chain figured out george launched his business online, not sure whether anyone would be willing to pay between $250 and $450 for his hand crafted shoes. one mention on a blog called secretforts sealed his fate. >> that first day i thought maybe we'll sell a few pairs of shoes, but that day we sold out of all of our inventory within 24 hours. we were out. and so the fact that our shoes are handmade presented a problem because they take about six weeks to make. and we know that's a long time. but even though we sold out, we immediately went to a six-week preorder system, and customers were still ordering. >> all after sudden the orders came flowing in. it was amazing how quickly he became a big part of my business. >> now, three years into the business, oak street boot makers has stoked the artisan economy
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with his hand crafted shoes with people still sometimes waiting six weeks for a pair of them. his hands-on approach has him working side-by-side with nick horween in chicago on the leather, adam sutton in maine to be hand sewn and george frequently visits maine to personally monitor and inspect every pair of shoes before they ship. >> we don't see our factory as just a factory that's making our shoes. it's really a relationship. when i see a shoe, i can actually tell who sewed it. it's like their signature. and so going to maine and being a part of that is just part of the dna, taking what we do and finding someone else that's created what they do, pairing them with his effort, expertise, creating a product the market wanted. ♪ i put some new shoes on
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oak street ultimately found its place in the market by promoting its handmade american produced products. for another shoe company, the problem it had was its brand was outdated and its appeal was a bit too narrow. as we first told you a while back, the solution, as is the case with so many small businesses, are was to re-invent itself. ♪ walking through the busy showroom of the enes is low shoe center, you would never guess they almost folded after 60 years in business. >> i felt i was in charge of the legacy business, that my responsibility was to make sure it continued. people come to us and we save their lives. we give them back their ability to walk on the planet pain free. >> 25 years ago robert schwarz was running a lucrative custom medical shoe business with eight stores, 110 employees, and more
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than $4 million in revenue. >> the eneslow model was based on consumers being referred by doctors. you really should have a different insert in each shoe. when the medicaid train started to rev up and dominate our business, now all of a sudden people were coming in with a prescription for, quote/unquote, orthopedic shoes. they were really looking for free shoes. >> medicare customers soon accounted for more than 50% of the company's revenue bringing in a steady and reliable stream of business, that is, until the other shoe dropped. >> the formula for medicaid was no longer viable, that half of our business was no longer going to be there. >> he knew he needed to radically downsize the company in order to save it, but it took some advice from a mentor to help had him figure out that downsizing meant closing seven of his eight new york stores. >> so at the end of 1989 we
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closed up all the branches and we were now a one store business. >> with less overhead, schwarz was now free to reposition his company for the future with some bold changes to the brand. while he stayed true to eneslow's roots by keeping its cu custom shoe department, he focused in on a new shoe market for comfortable but stylish shoes that would appeal to a broader can customer. >> i spent more time focusing on consumer driven products, styles that were comfortable and also more fashionable. >> it does look like you're catering partly to a customer that cares about fashion, because if you look around they don't look like orthopedic shoes. >> you are exactly right. we could not be a store growing and doing as much business as we do and stay hard core to the shoes only. >> the reinvention had begun.
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♪ i want to put on my boogie shoes ♪ >> with eneslow's reinvention complete, it is now thriving with aging baby boomers seeking out its services in record numbers. while he says the road was rough, schwarz says he never even thought of giving up on the business. for many small business owners, the key to getting your product or service out there lies in the hands of some large company you want to do a deal wi with. it could be that you have a product you want walmart to carry or you want to create a marketing arrangement with starbucks, for instance. but how do you get through the door? and even if you do get that crucial introduction, how do you present your opportunity in a way that piques their interest? our guests has tips to get small owners talks with big brands. rachel weiss at l'oreal usa is responsible for digital marketing, social media strategy, and new digital business vep tours and
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partnerships. great to see you. >> it's great to be here, j.j. >> you, in your hands lies the key for many small business owners. they just want to get to you so that they can pitch their business and some sort of arrangement. you must get people coming into you all the time or at least trying to. >> yes. i get a minimum of 20, at the minimum, blind requests for meetings per day. so competition is fierce and there are tips to help you get through the door. >> okay. so you get 20. which ones do you respond to? what can i do to make you say, okay, i want j.j. to come in? >> there are certain strategies that help you get through my inbox a little bit better than having a blind call or through linke linkedin. i think if you want to do business with a big company and a big brand, do your research. know what that company does and have an idea of how you can solve that problem. once you know that, find somebody who works with that company, within that company, or know that is company.
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we're big companies. there's lots of people that work there. find a credible introduction. >> you say have a solution for them. so i think i have a product that would be great for l'oreal or a marketing strategy that would be great, i come in and say here is the solution, but how do i really know if that's your problem unless i can get in to talk to you in the first place? >> well, there's two steps. right, you have to get in through the front door. but the research has to happen before you get in the front door. i have so many people who come to me with just capabilities presentations of what their company does. and they may not have a perfect slaugs but i like to see they're thinking about solutions and they know what we do and they're paying attention to what our business strategy is. there's many ways you can do that. you can do that by reading press releases, by watching our executives speak at conferences on youtube, you can actually go on our corporate facebook brand pages to really find out what the company is doing. have an idea in mind, just saying what you can do and not what you can do for us is not enough. >> i start the conversation saying, what are your goals to you at l'oreal or saying, this
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is what i think your objectives might be but can you tell me if i'm right or not? >> ask me what our goals are is a great conversation start er with but have an idea in mind. having just a blind conversation, there's so much competition out there, and if we're going to take a meeting with you and you do get through the front door, chances are we're also meeting with people who are already like you or might have a similar solution in mind. so you need to be able to not only articulate what you can do for us but have a solution and also know what your competition does and what is your own point of difference. >> okay. you talked about formalized corporate programs. do a lot of can companies have programs where entrepreneurs can come in and talk to you? >> yes, i am seeing more formalized programs on innovation and incubation in fortune 500 companies. we have one at lo'oreal called l'oreal women in digital focused on tech startups that are operated by women. it's a formalized program. our admission of this program is to provide introductions for
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women who own tech companies into the company to help us simplify and create new ways for women to shop using technology. this is a formalized program. it has a calendar. it has a website. it has a protocol. i see other big companies having similar perhaps as well. >> wow. okay. and then have a case study re ready. this is a are tricky one. if you're just starting out and you don't have big marketing budget, you haven't been able to get into a big company before, you are my first meeting, how do i have a case study? >> if you don't have a case study, at least have enough data as possible because once you get that first meeting, the person who has sold into your idea, chances are they're not going to be able to make a decision in a vacuum and they actually become an extended employee of yours and become part of your sales force. you need to arm that person with as much data as possible. now if you don't have data and you don't have a case study, there's two tips i can give. the first is have a clear idea of what success would look like and be able to articulate that up front. the second is be open it to doing a pilot with the big
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company and that might be something you have to do for free or for a short amount of time, at least to prove what you're doing to get through the front door and actually start to create data that can scale throughout the company and help selling what your idea is. >> and finally a lot of can companies start as sort of, you know, work by the seat of their pants. they pitch things. that's a good idea. they don't necessarily do formal presentations, formal business plans. when you go in to see someone at a big brand, do you need to make a formal power point, beautiful presentation, or can you just have a conversation? >> i think you need both. you need to be able to have a conversation on the fly, be open to brain storming, open to ideas. what you think your company might offer, might be something different than what the company thinks you might offer and, also, because this person is going to start to share your information throughout the organization, having a nice presentation or even having a video and seeing a lot of startups create videos for what their company does, is a great way to share what you're doing and help me or whoever it is you meet with sell throughout my own company. >> rachel, thanks so much for coming in.
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>> thank you for having me. when we come back, how do you raise capital without giving away too much of your company? and we'll tell you about some free online classes to sharpen your entrepreneurial skills. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership.
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it's time now to answer some of your business questions. brian is a digital entrepreneur. his current venture is chooser which helps companies make better hires, quickly, and more effectively using social networks. sarah robinson is president and ceo of sarah robinson company. she's a business coach, a strategist, and an adviser who helps business owners set their companies apart from the rest. sarah's also author of the book "fierce loyalty." great to see both of you. brian, you started a new company since you were last here. >> i have. it's an exciting concept. it's so hard to hire members of your team and using social media is a natural fit. we're just getting started and it's exciting. >> you are both well poised to answer these questions. let's start with the first one. it's about negotiating equity in your business. >> is there a formula to raise capital without giving away too
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much equity in the company based on a current valuation? >> it's a lot about negotiation but how do you even know where to start? >> well, for me i think it's a personal choice how you want to do that. i would say don't give away any more than 49% because then you lose control of your company altogether. i wouldn't give away more than 25% really because then you lose a lot of power votes. personally, i wouldn't give away any because i don't want somebody else telling me how to run my business, but that's me. i'm curious to know what you think about that. >> i might take a less quantitative approach. i've run companies where you give away anywhere from 2% to 80%. to me it's about not how much you give away but how much value you retain. so think about it strategically going into the negotiation. how can you go in having created a lot of value, customers, product, marketing traction? if you created value, then the cash is worth less relative to
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what you created and you'll have to give away less as well. >> also, in the very early stages when you don't have a way to basically value your company, convertible debt is an interesting way to start. >> that's a great idea. let the next round set the price when we have more information to go by. >>question. about hiring. >> a lot of really great candidates out there. one, two years out of college with incredible internship experience. but not a lot of actual work experience. so i would like to know some key questions -- key things to look for in interviewing so i can choose the best person. >> is there a unique question you asked that elicited responses that really helped you get to know someone? >> i will defer to you first because you have been in the hiring position in the past. >> i have seen event are you kind of intern apply for every kind of job. the trick to me, here is a question i like. ask them -- in the internship you had, give me a specific
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example where you acted like a full-time member of the staff. and then what results did you get from acting like that? that's a great way to think do they have the mindset of acting like a real employee good that's what's for, mindset. you are not -- it doesn't matter as much what work experience somebody had when they are 21 years old and getting out of college. you want somebody who is ambitious and a fast learner and if that's the job you are hiring for. >> team player. >> absolutely. >> the question that i love is, you know, give me an example of a project where you took it from start to finish so that you can -- walk me through that process. so you can find out what kind of initiative do they have? how do they build a team so that they can complete something. even if it is a simple project which a lot of interns have. you want to know how it works. >> it can be a school project. >> exactly. >> someone told me an interesting question that he always asks, he said how lucky do you think you are. from one to ten, how lucky do you think you are.
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because he says he wants to be -- for what he is looking for he likes to have people that feel like they are lucky. >> wow. >> okay. that is really good. moving to the next question, it is about moving production overseas. >> how can a locally handmade company increase the wholesale volume? sit a must at some point to produce overseas to lower costs in today's reality? >> not necessarily. right? >> no. mine, like anything else, it is a question of identifying what special value you bring to a product. you need to hold on to that and make sure that probably you want to do it on your own. just like you outsource any other service if you are not a website designer, you are not going to try to do it yourself. you will hire a good design firm and keep close watch on what they do but let the experts do their work. the same way, their production, you know, firms, sometimes they are overseas. sometimes they are here. you want to outsource it to them. >> actually, hidden costs, too. it may be cheaper to go overseas but then there are all these costs in shipping and problems
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and the mistakes and things you need to factor in. >> absolutely. my first question to her if i was working with her, how for is made in the usa to your brands? if it is part of your brand's identity and your customers expect that from you, then absolutely you have to do it here. because you can't muddy those waters. but if you factor in all of the things that you talked about, you know, if -- actually outsourcing it overseas, does wind up being cheaper and having it made overseas does not negative limb pact your brand, it is absolutely worth considering. >> okay. finally, the last one, e-mail from anita. she wrote how can i maximize social media at a private golf club? we are restricted to communicating with our membership which is not published. we tried twitter with dismal results. any suggestions? all right. fierce loyalty. >> yeah. i will go with that because i'm a twitter junky. you just have to look at my tweet stream to see i'm a total twitter junky. twitter isn't the place for
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everyone. it sounds like what she says with her golf club, she needs place where she can set up a privilege at community. that's more facebook. google plus. and probably linkden would be good, i would bet, for her membership. because then she can create a closed community and really communicate directly with the people she is trying to reach. twitter is great for really broad broadcast. but it is not great if you have small community. >> look at some like pinterest. we are not just talking about home membership messages or dues are due or whatever it is. you can have videos of your golf pros, you know, having video of tips. you know, pictures of your favorite golf products. >> or events if you have events at your club. >> great idea. bria brian,sarah, thanks very much. if any of you out there have a question for our experts and want an answer here, go to our
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website. openforum.com/yourbusiness. once you get there, just hit the ask the show link to submit a question for our panel. i you can e-mail us your questions and your comments to your business@msnbc.com. one of the reasons i love having you on the panel is you both have a lot of experience. you know that you can't talk about this in the details until you have really done it because then you realize what a headache it is. so we -- we go out periodically and go get advice not only from you but from other entrepreneurs. let's get more great ideas from them. >> my tip for small business is to start out slow and share space, internally share space, with another similar business. you can share creative ideas. as well as save money on our rent. you can move slowly rather than taking on rent and, you know,
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having a big expense. >> it is never too late to start your own business. my husband and i started our business after 50 years experience in our industry. and we decided that this time was as good as any. my tip is take a risk. start your own business. it is worth it. >> i'm about to go back and date myself to my 15th year reunion for business school. i'm excited. we got to look at the courses happening there. one course that you have taken since school that is helpful for business? >> i have not taken any courses since school. >> i took a master's marketing course. really helpful. >> i think that's the thing, we forget. you need to know this. courses are incredibly helpful which is why today we have five free online courses that every entrepreneur should take. this is courtesy of inc.com. developing innovative ideas for new companies. this six-week course taught by james b. green of the university
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of maryland will help you through the initial steps of creating a business plan and evaluating whether there is real demand for your product. two, introduction to finance by call of the university of michigan will teach you how to make sound personal decisions. in six weeks you can learn how to think about business strategy in a more systematic way. four, grow to greatness. smart growth for private businesses by edward hess of the university of virginia. this two-part course, each four weeks long, focuses on common challenges facing an entrepreneur that wants to grow his or her business. and five, december sign thinking for business innovation. a five-week course taught by university of virginia's jeanne liedtka. i don't know if this is
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generational or what but so many entrepreneurs i know who are my age still write everything on post-it notes. even though there is all this technology out there. >> i make lists. that's the only way i get anything done. i write it -- i write it, hand write it. handwritten. >> every week, every month, i try a new online service and they are all kind of great. when i need to remember something i still put it on a post-it note and paste it to my laptop. >> this is for all of us. our app of the week. spring pad. free app that helps you save reminders, checklists and photos and more into an easy-to-organize visual platform. app then enhances your notes with relevant suggestions that will help be even more productive. finally, effortlessly save and access your information from all of your devices and the web. it is worth at least us trying. thanks so much for watching the show today. quick reminder, you can always find these segments and all of the others we have done on the web. it is at openforum.com/yourbusiness. on twitter, we
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@msn @msnbc-yourbusiness. >> because it is -- it is dash elegantly dissxlad we have a clear, company he issive message and end up being drawn in and want to see what we are doing. >> see how these two entrepreneurs are getting customers by integrating their design aesthetic into everything from their work space to their trade shows. remember, we make your business our business. we've all had those moments. when you lost the thing you can't believe you lost. when what you just bought, just broke. or when you have a little trouble